LINKING, CONTENT LICENSING AND ADVERTISING AGREEMENT
THIS LINKING, CONTENT LICENSING AND ADVERTISING AGREEMENT ('Agreement') is made
this 8th day of April, 1998 ('Effective Date'), by and among JAMtv Corporation,
a Delaware corporation with its principal offices at 640 North LaSalle Street,
Suite 560, Chicago, Illinois 60610 ('Jam'), Straight Arrow Publishers, a New
York partnership with its principal offices at 1290 Avenue of Americas, 2nd
Floor, New York, New York 10104 ('Straight Arrow'), and CDnow, Inc., a
Pennsylvania corporation, with its principal offices at Jenkins Court, Suite
300, 610 Old York Road, Jenkintown, Pennsylvania 19046 ('CDnow'); each a 'party'
and collectively the 'parties.'
CDnow sells a variety of entertainment products through a retail vending site on
the Internet's World Wide Web at the Universal Resource Locator ('URL') of:
www.cdnow.com (the 'CDnow Site').
Straight Arrow owns and operates Rolling Stone magazine and owns certain content
related thereto and the name, trademark and brand 'Rolling Stone' (hereinafter
collectively known as 'RS').
Jam and Straight Arrow have entered into a legally binding agreement to form a
joint venture arrangement for the Rolling Stone Network ('RSN') whereby Jam will
operate RSN-branded Sites ('RSN Sites' is defined in Section 1 below), and
Straight Arrow is providing the Straight Arrow Content to Jam for its exclusive
use with the RSN Sites.
CDnow, Jam and Straight Arrow wish to enter into this Agreement whereby CDnow
will be the exclusive Music Seller with a license to use, copy and display the
Content and advertise and have links on the RSN Sites. Additionally, CDnow will
purchase online advertising on the RSN Sites, radio air time from the radio
airtime available through Jam and advertising space in RS print publications.
NOW THEREFORE, in consideration of the mutual promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound, the parties hereby agree
as follows:
1. DEFINITIONS Capitalized terms not otherwise defined in this Agreement will
have the following meanings:
(a) 'Above-the-Fold' means situated within the portion of a page that is
designed to be visible on a standard computer screen with a resolution of 640
pixels by 480 pixels without requiring the user to scroll horizontally or
vertically through the page.
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'Agreement' is defined in the first paragraph of the preamble to this Agreement.
(c) '[XXX]' and '[XXX] Agreement' are defined in Section 2(b)(ii)(A) of
this Agreement.
(d) '[XXX] Content' is defined in Section 2(e) of this Agreement.
(e) 'Carry-Through Bar' means a bar, which, when clicked, links an RSN user
back to the RSN Site from the Co-branded Pages.
(f) 'CDnow is defined in the first paragraph of the preamble to this
Agreement.
(g) 'CDnow Link' means any form of link that contains a CDnow designed
and/or approved proprietary feature, is located on a page on an RSN Site and
takes an RSN user to a Co-branded Page. CDnow will provide screen shot mockups
of the Co-branded Pages as set forth in Exhibit C to this Agreement.
(h) 'CDnow Site' is defined in the second paragraph of the preamble to this
Agreement.
(i) 'Co-branded Page' means a page residing on CDnow's servers that a
visitor from RSN's Site will link to, which displays certain proprietary
features of both RSN and CDnow, and where such visitor can purchase CDnow
products. A Co-branded Page can only be viewed by a visitor who links to it
directly from RSN's Site or through a stored URL (e.g. bookmark or similar
technological storage mechanism).
(j) 'Competitive Marketing' is any advertising, promotion, sponsorship,
link or displayed message (not provided or sponsored by CDnow) that [XXX].
(k) 'Confidential Information' is defined in Section 15(a) of this
Agreement.
(l) 'Content' means, collectively, the Straight Arrow Content (as defined
in Section 1(aa) below) and the Jam Content (as defined in Section 1(p) below).
(m) 'Content Indices' is defined in Section 2(c)(i) of this Agreement.
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(n) 'Effective Date' is defined in the first paragraph of the preamble to
this Agreement.
(o) 'Entity' means any natural person, partnership, corporation, or
division, subsidiary or business unit thereof, retail site, Internet site, World
Wide Web site or other form of business organization.
(p) 'Exclusive [XXX] Content' means, as of the Effective Date, the
following content provided to [XXX] under the [XXX] Agreement: (i) 'Interactive
Cover Story' consisting of a supplemental story or supplemental content (e.g., a
brief synopsis, additional content or pictures, or sound or video clips related
to the cover story) to RS's current cover story; (ii) certain elements of the
Rolling Stone Photo Gallery;' (iii) certain elements of the 'Rewind' section'
and (iv) the 'Read Me Now' section, featuring a welcome screen, letters to RS,
sections allowing members to write letters to RS and to participate or vote in
RS polls, contests and online programs, previews of forthcoming features in the
RS area within the [XXX] proprietary online service and other special features
such as offerings, contests and quizzes.
(q) 'Finder's Fee Advance' is defined in Section 6(c)(i) of this Agreement.
(r) 'Jam' is defined in the first paragraph of the preamble to this
Agreement.
(s) 'Jam Content' means all existing and future digitized and non-digitized
articles, reviews, digital or transcribed interviews, video and audio libraries,
photographs, books and any other content which Jam has created, published or
produced, or which Jam has access to through a licensing arrangement with any
other Entity, provided Jam has the right to license or sublicense the foregoing.
(t) 'Launch Event' is defined in Article 5 of this Agreement.
(u) 'Marks' means a party's names, brand names, logos, trademarks,
tradenames, servicemarks and other proprietary indicia
(v) 'Music Seller' means any Entity, which sells pre-recorded music or
enables a person to purchase pre-recorded music online through the Internet, the
World Wide Web or any other open or proprietary online service.
(w) 'New Customer' is defined in Section 6(c)(i) of this Agreement.
(x) In this Agreement, 'party' and 'parties' are defined in the first
paragraph of the preamble.
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(y) 'RS' is defined in the third paragraph of the preamble to this
Agreement.
(z) 'RSN' is defined in the fourth paragraph of the preamble to this
Agreement.
(aa) 'RSN Sites' means collectively, all Jam Sites, all RSN Sites and all
Sites operated by Jam for Straight Arrow.
(ab) 'Site' means a site on the Internet, the World Wide Web or on any open
or proprietary online service.
(ac) 'Straight Arrow' is defined in the first paragraph of the preamble to
this Agreement.
(ad) 'Straight Arrow Content' means the content specified in Exhibit B -
'Rolling Stone Content' to this Agreement
(ae) 'Straight Arrow/Jam Exclusive License Agreement' is defined in Section
2(d) of this Agreement.
(af) 'Term' is defined in Article 12 of this Agreement.
(ag) 'URL' is defined in the second paragraph of the preamble to this
Agreement.
2. CONTENT.
(A) LICENSE.
(i) Subject to the terms of this Agreement, JAM hereby grants to CDnow
during the Term a worldwide license to access, use, copy, modify and
reformat for display purposes and display the Content solely on CDnow's
Site or its servers. By way of example, and not limitation, permitted uses
includes digitizing non-digitized content.
(ii) CDnow will: (A) use [XXX] from each Content article, review or
the like without the prior consent of Jam; (B) provide a textual link-back
to the RSN Sites as part of such usage, [XXX] and (C) not distribute the
Content to any third party, except as permitted under an agreement mutually
acceptable to the parties.
(iii) For Content requested by CDnow where Jam or Straight Arrow do
not have the requisite rights to provide CDnow with such Content for its
use pursuant to this
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Agreement, Jam and Straight Arrow will use their respective best efforts to
assist CDnow in obtaining such rights, provided CDnow shall bear all costs
or expenses in connection therewith.
(B) EXCLUSIVITY AND LIMITATIONS ON EXCLUSIVITY.
(i) Exclusivity. During the Term and except as set forth in Section
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2(b)(ii) below, Jam and Straight Arrow represent and warrant that CDnow
will be the exclusive Music Seller anywhere in the world that is permitted
to access, use, copy, modify and reformat for display purposes and display
the Content on any Site.
(ii) Limitations on Exclusivity.
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(A) [XXX]
(B) [XXX]
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(C) [XXX]
(C) ACCESS TO AND DELIVERY OF CONTENT.
(i) Content Indices. Within forty-eight hours of the Effective Date
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and continuing throughout the Term, Jam will make available to CDnow, and
upon CDnow's request, reasonably provide access to CDnow, any and all
indices in any form of the Content (the 'Content Indices'). During the
Term, as updated new Content Indices become available, Jam will immediately
provide access to such updated or new Content Indices to CDnow.
(ii) Content Delivery. Within three (3) business days of each receipt
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of a request from CDnow, Jam will deliver to CDnow the Content requested.
If the Content is available in digitized form, Jam will deliver it in such
form to CDnow in a manner mutually agreeable to the parties. If the
Content is not available in digitized form, then Jam will deliver it in the
best form in which it is available, and, at CDnow's discretion, (A)
promptly (but in no event more than three (3) business days after receipt
of a request) digitize the requested Content, which digitized Content shall
be deemed to also be part of the Content, in a form mutually agreeable to
the parties; or (B) CDnow may have a third party digitize the Content for
CDnow, at no expense to Jam, and CDnow will provide a copy of all such
digitized material to Jam, at no cost. CDnow and Jam agree to reasonably
cooperate in fulfilling CDnow's requests for Content.
(iii) Access to the Jam and Straight Arrow Libraries. At CDnow's
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request at any time and from time to time, Jam will make available a
librarian knowledgeable in the Content and the structure of the Jam and
Straight Arrow Content libraries in the possession
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of Straight Arrow or Jam (as the case may be), and such librarian will
assist CDnow in accessing, digitizing and delivering the Content. CDnow
will pay a reasonable hourly rate for such librarian's time devoted to
assisting CDnow, which rate CDnow and Jam will mutually agree upon based on
good faith and diligent negotiations.
(D) OTHER REPRESENTATIONS AND WARRANTIES OF JAM. Jam represents and
warrants that as of the Effective Date and continuing throughout the Term: (i)
the Content available to CDnow under this Agreement is all of the Content owned
or licensed by Jam from Straight Arrow; (ii) except for the exclusivity
limitations set forth in Section 2(b)(ii) above, Jam has an exclusive, worldwide
license with Straight Arrow for use of all of the Straight Arrow Content in
connection with the RSN Sites, which is stated as such in the exclusive license
agreement entered in by and between Jam and Straight Arrow, dated as of _______
(the 'Straight Arrow/Jam Exclusive License Agreement'), and Straight Arrow has
expressly consented to Jam sub-licensing the Straight Arrow Content to CDnow so
that Jam can fulfill its obligations under this Agreement, and CDnow can access
and use the Content as set forth in this Agreement; (iii) the Straight Arrow
Content has not been altered, redacted or modified in any manner from the
original substance provided to Jam from Straight Arrow; (iv) except as set forth
in Section 3(a)(ii)(B) below, Jam will not operate any Sites anywhere in the
world (other than the RSN Sites) independently of or in conjunction with
Straight Arrow that contains the Content in whole or in part and any Competitive
Marketing; and (v) Jam shall license and deliver to CDnow the [XXX] Content,
subject to and consistent with the terms and conditions of this Agreement.
(E) OTHER REPRESENTATIONS AND WARRANTIES OF STRAIGHT ARROW. Straight Arrow
represents and warrants that as of the Effective Date and continuing throughout
the Term: (i) the Straight Arrow Content licensed to Jam under the Straight
Arrow/Jam Exclusive License Agreement is all of the Straight Arrow Content owned
or licensed by Straight Arrow; (ii) except for the exclusivity limitations set
forth in Section 2(b)(ii) above, Jam has an exclusive, worldwide license with
Straight Arrow for use of all of the Straight Arrow Content in connection with
the RSN Sites, which is stated as such in the Straight Arrow/Jam Exclusive
License Agreement, and Straight Arrow has expressly consented to Jam sub-
licensing the Straight Arrow Content to CDnow so that Jam can fulfill its
obligations under this Agreement, and CDnow can access and use the Straight
Arrow Content as set forth in this Agreement; (iii) except for the exclusivity
limitations set forth in Section 2(b)(ii) above, Straight Arrow has not licensed
the Straight Arrow Content, in whole or in part, to any third party for use
online or on any Site; (iv) during the Term, Straight Arrow will not operate,
independently of or in conjunction with Jam, any Sites (other than the RSN
Sites) that contain the Content in whole or in part and any Competitive
Marketing; and (v) any and all Content (other than the Exclusive [XXX] Content)
made available or delivered to [XXX] or any third party under or pursuant to the
[XXX] Agreement ('[XXX] Content'), shall also be licensed and delivered to Jam
pursuant to the Straight Arrow/Jam Exclusive License Agreement, and Jam is
permitted to license and deliver to CDnow the [XXX] Content subject to and
consistent with the terms of this Agreement.
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(F) REPRESENTATIONS AND WARRANTIES OF CDNOW. CDnow acknowledges that the
Straight Arrow Content is the valuable intellectual property of Straight Arrow
and the Jam Content is the valuable intellectual property of Jam, and CDnow
agrees that it shall not use or modify any of the Content, except as otherwise
permitted under this Agreement or as otherwise permitted by Jam or Straight
Arrow in their reasonable business judgment or, if applicable, by Straight Arrow
in its discretion as set forth in Section 8 of Exhibit B to this Agreement.
3. RSN SITES.
(A) EXCLUSIVITY AND LIMITATIONS ON EXCLUSIVITY.
(i) Exclusivity. Except as set forth in Section 3(a)(ii) below,
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during the Term:
(1) Jam represents and warrants that CDnow will be the exclusive
Music Seller throughout the world that can sell recorded music
through, and place advertising, promotions, buttons, banners or other
forms of links for the sale of recorded music on, the RSN Sites.
(2) Jam will use its best efforts to encourage [XXX].
(3) If Jam, Straight Arrow or a third party wishes to sell one or
more recorded music products on the RSN Sites that are not offered by
CDnow, Jam shall give CDnow a right of first refusal to offer such
products. If CDnow, within twenty (20) days of being provided such
offer by Jam, determines not to offer such products, then Jam may
permit such third party to offer such products for sale on the RSN
Sites; provided that if and when CDnow offers such products, Jam shall
terminate such third party's right to offer such products for sale on
the RSN Sites as soon as practicably feasible, and, thereafter, CDnow
shall be the exclusive Music Seller with the right to offer such
products on the RSN Sites.
(ii) Limitations on Exclusivity.
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(A) This terms of Section 3(a) shall not apply to: [XXX]
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(B) [XXX]
(B) DELIVERY AND PLACEMENT OF CDNOW LINKS. During the Term, Jam shall
place the CDnow Links on the RSN Sites in accordance with the requirements set
forth in this Section 3(b).
(i) Jam shall place the CDnow Links on the pages on the RSN Sites, and
all existing and future equivalents, extensions or replacements of such
pages on the RSN Sites, in accordance with the specifications set forth in
Exhibit C to this Agreement. Unless
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otherwise specified in this Section 3(b), during the Term, the CDnow Links
shall be permanent and non-rotating.
(ii) On Jam's Sites, Jam shall place [XXX].
(iii) On the RSN Sites, Jam shall place [XXX].
(iv) Jam agrees that CDnow may vary the elements of the CDnow Links no
less than [XXX] per month, upon five (5) business days notice.
(v) Prior to implementing any modifications to the CDnow Links not
requested by CDnow, Jam will obtain the written consent of CDnow, which
consent shall not be unreasonably withheld.
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(C) MINIMUM CDNOW LINK GUARANTEES. During the Term, Jam and RSN will
deliver to users of the RSN Sites a minimum of [XXX] CDnow Links on pages
on the RSN Sites in accordance with the following schedule: (i) the first twelve
months beginning on the date the CDnow Links are fully implemented and
operational on the RSN Sites -- [XXX] CDnow Links; (ii) the twelve months
following the first twelve months -- [XXX] CDnow Links; and (iii) the
twelve months following the second twelve months -- [XXX] CDnow Links.
(D) CONTINUED DEVELOPMENT OF OTHER CDNOW LINK PLACEMENT OPPORTUNITIES. The
parties agree to work together during the Term in good faith to identify and
implement appropriate placement of the CDnow Links throughout the RSN Sites,
including all necessary testing of the performance of such links.
4. BUSINESS DEVELOPMENT OPPORTUNITIES.
(A) Throughout the Term, the parties will mutually work together in good
faith to identify, create, develop and implement marketing and public relations
opportunities for additional sales, advertising and promotion of CDnow on the
RSN Sites and other Jam and Straight Arrow Sites and media properties, sale of
RSN merchandise and co-branding of traffic flows between the Co-branded Pages,
the CDnow Site and the RSN Sites.
(B) Throughout the Term, the parties will mutually work together in good
faith to identify, create, develop and implement opportunities for CDnow to
distribute the Content to CDnow business partners. CDnow will not distribute
the Content except as permitted under agreement mutually acceptable to the
parties.
(C) Throughout the Term, Jam and Straight Arrow will, in good faith and
where feasible, offer CDnow, and CDnow will, in good faith and where feasible
offer Jam and Straight Arrow, the opportunity and right of first refusal to
participate in other business relationships (similar to the business
relationships envisioned under this Agreement) Jam, Straight Arrow or CDnow (as
the case may be) have entered into or are considering entering into, and, upon
receipt of such offer by, and expression of interest from, a party, the parties
agree to negotiate diligently and in good faith to develop a definitive
agreement concerning each such opportunity.
5. LAUNCH EVENT. During the Term, the parties will [XXX].
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6. PAYMENTS. During the Term and in consideration of Jam and Straight Arrow
fulfilling their respective obligations under this Agreement, CDnow will make
the payments to Jam and Straight Arrow (as appropriate) as set forth in Sections
6(a) through (c) below:
(A) CONTENT LICENSE FEES. CDnow agrees to pay Jam (provided the Straight
Arrow/Jam Exclusive License Agreement remains continually in effect during the
Term so that Jam can fulfill its obligations as stated hereunder) [XXX] for the
exclusive right to use the Content during the term of this Agreement as set
forth in Article 2 above. Payment will be made in the following manner: [XXX]
upon execution of this Agreement, [XXX] ninety (90) days and one hundred and
eighty (180) days, respectively, after the Effective Date, and, thereafter,
commencing in the second year of the Term through the Term, equal quarterly
payments of [XXX] within ten (10) days of the first day of each calendar quarter
for the upcoming quarter, provided the CDnow Links are continuously fully
implemented and operational on the RSN Sites.
(B) PRINT, BROADCAST AND WEBSITE ADVERTISING, PROMOTION AND LINKING FEES.
CDnow agrees to purchase a total of [XXX] from (A) Jam in RSN Site advertising,
promotions and links, (B) [XXX] from Straight Arrow, (C) [XXX] from Jam and (D)
promotions in media properties controlled (currently and in the future) by
Straight Arrow and/or Jam or its radio affiliates, during the Term and as
follows:
(i) CDnow will allocate the print, broadcast and other promotional
advertising dollars as follows: (i) [XXX] and (ii) [XXX]. Jam will receive
a commission of [XXX], which amount shall be over and above the [XXX] in
advertising fees, and such commission shall be payable in equal
installments of [XXX] on the Effective Date, the first day of the second
year of the Term and the first day of the third year of the Term. Payment
for [XXX], including the appropriate pro rata portion of the [XXX], will be
made within thirty (30) days of the date on which such [XXX], as the case
may be.
(ii) CDnow will pay Jam [XXX] for delivery of the minimum number
of guaranteed CDnow Links on the RSN Sites pursuant to Article 3 of this
Agreement according to the payment schedule set forth in this Section
6(b)(ii). Payments for delivery of CDnow Links shall be made quarterly
with the first payment due within thirty (30) days following the date on
which the parties mutually agree that the CDnow Links have been fully
implemented, are fully operational and are available to users on the RSN
Sites. Payment for each subsequent quarter shall be made within thirty
(30) days following the end of the quarter. [XXX]
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(iii) Straight Arrow shall [XXX]. Jam shall use its best efforts to
obtain [XXX].
(C) NEW CUSTOMER FINDER'S FEE.
(i) CDnow agrees to pay Jam a one-time finder's fee of [XXX] for each
new customer acquired via a direct online link between CDnow's Site and any
of the RSN Sites, provided such New Customer makes a non-returned purchase
on CDnow's Site when first linking from a RSN Site to a Co-branded Page
('New Customer'). For purposes of this Section 6(c), the same customer who
may repeatedly link to a Co-branded Page from the RSN Sites over any length
of time shall be considered a new customer only the first time the customer
links to a Co-branded Page from a RSN Site. CDnow will pay a [XXX] advance
on such fees of [XXX], amounting to a total of [XXX] (the 'Finder's Fee
Advance') during the term of this Agreement, and such quarterly advances
shall be due and payable within ten (10) days following the first day of
the quarter. Each New Customer shall result in a decrement of the
outstanding credit balance of the Finder's Fee Advance by [XXX], until such
balance shall equal [XXX], at which time, CDnow shall pay Jam [XXX] in cash
for each New Customer, with such payments due on a quarterly basis.
(ii) If, upon termination of this Agreement [XXX]
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(D) PAYMENT SUMMARY. The following summarizes the payments terms set forth
in Sections 6(a) through (c) above: [XXX]
7. AUDIT RIGHTS; REPORTING
(A) AUDIT RIGHTS; UNDER/OVER PAYMENTS. Each party shall maintain complete
and accurate records in accordance with U.S. Generally Accepted Accounting
Principles (GAAP) for all transactions which are the subject of this Agreement
for not less than (3) years after the last payment is due under this Agreement.
A 'big six' independent accounting firm retained by a party (the auditing party)
shall have access to such records of the other party (the audited party), upon
reasonable notice, for the purposes of audit during normal business hours, for
so long as such records are required to be maintained. If such accounting firm
determines that any additional payment is due the auditing party by the audited
party and such payment is not the subject of a good faith dispute between the
parties, then the audited party shall promptly make payment of such amount plus
interest at a rate of six percent (6%) per annum to the auditing party. If a
party overpays the other party, the party that has made such overpayment shall
be entitled to a credit against the next payment due to the other party in the
amount of the overpayment, unless such overpayment is the subject of a good
faith dispute between the parties or if no further payments are due under this
Agreement, in which case, the party that has received the overpayment will
promptly refund to the other party the amount of the overpayment.
(B) REPORTING.
(i) Within thirty (30) days after the end of each calendar month
during the Term, CDnow shall provide Jam with a report listing the number
of New Customers and the
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Finder's Fees due to Jam. Such report is to be used by Jam solely to
track whether CDnow is fulfilling its obligations under this Agreement.
(ii) On the first business day of each week during the Term, Jam will
provide CDnow with a weekly report of CDnow Links delivered to users of
RSN's Site during the immediately preceding week in a form and via media
mutually agreeable to the parties.
(iii) During the Term, each of Jam and Straight Arrow will provide
CDnow with monthly reports of total [XXX] promotions delivered by each
party in a form and via a method mutually acceptable to CDnow and Jam or
Straight Arrow (as the case may be). Such reports are to be used by CDnow
solely to track whether Jam and Straight Arrow are fulfilling their
obligations under this Agreement.
8. FRAMING AND RETURN LINKS. During the Term and thereafter, Jam shall not
frame in any manner the CDnow Site or any Co-branded Pages or pages from the
CDnow Site. When an RSN user clicks on a button, banner or any other form of
link to a Co-branded Page, such user shall be transferred directly to the Co-
branded Page without such framing. CDnow shall place a Carry-Through Bar on the
Co-branded Pages that will provide a user that has linked to a Co-branded Page
from a RSN Site with an opportunity to return to the RSN Site. CDnow and Jam
shall mutually agree upon the overall design of the Carry-Through Bar within the
specifications provided by CDnow in the Carry-Through Bar Specifications,
attached hereto as Exhibit A to this Agreement.
9. FULFILLMENT. During the Term and thereafter, CDnow shall have the sole
right and responsibility for processing all orders through every aspect of a
transaction, including receiving, filling, shipping and handling, collecting
payment, tracking and transaction security. All orders for CDnow's products
shall be placed by customers directly with CDnow and shall be subject to
acceptance by CDnow. All orders accepted shall be subject to the terms and
conditions of CDnow's then current terms and conditions of sale. Such terms may
be changed at any time, without notice to Jam, RSN or its customers. CDnow
shall have no obligation to ship any orders unless payment in full is received
in advance. Prices for the products shall be set solely by CDnow. CDnow
reserves the right to change its prices at any time, without notice to Jam, RSN
or its customers.
10. STAFFING. During the Term, each party agrees to provide staffing
sufficient for such party to meet its obligations under this Agreement in a
timely manner. Further, each party shall appoint a relationship manager who
shall have responsibility for managing the day-to-day activities of the party
under this Agreement.
11. LICENSE; OWNERSHIP.
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(a) License to the 'Rolling Stone' Brand Name and Straight Arrow Marks.
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Straight Arrow hereby grants to CDnow, during the Term, a limited, worldwide,
non-transferable license to use the 'Rolling Stone' brand name and other
Straight Arrow Marks (as authorized by Straight Arrow from time to time) as
reasonably necessary for CDnow to exercise its rights, promote and sell its
products and fulfill its obligations under this Agreement. CDnow shall be the
exclusive Music Seller licensed to use the Rolling Stone brand name in
connection with online sales, except for sales by third parties licensed to sell
music compilations under the Rolling Stone brand name and except as otherwise
licensed to [XXX] under the [XXX] Agreement. Straight Arrow shall have the right
to approve all initial uses of the 'Rolling Stone' brand name, which approval
shall not be unreasonably withheld or delayed.
(b) License Between Jam and CDnow for Use of Marks. CDnow hereby grants to
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Jam, during the Term, a limited, non-exclusive, non-transferable license to use
CDnow's Marks (as authorized by CDnow from time to time) solely as reasonably
necessary for Jam to perform its obligations under this Agreement. Jam hereby
grants to CDnow, during the Term, a limited, non-exclusive, non-transferable
license to use Jam's Marks (as authorized by Jam from time to time) solely as
reasonably necessary for CDnow to perform its obligations under this Agreement.
Each of CDnow and Jam shall have the right to approve all initial uses of its
Marks by the other party, which approval shall not be unreasonably withheld or
delayed.
(c) Each party owns and shall retain all right, title and interest in its
Marks and other intellectual property. No party shall copy, distribute,
reproduce or use the other party's Marks or other intellectual property, except
as expressly permitted under this Agreement.
(d) No party shall at any time contest, impair or disparage in any manner,
or assist another party or any third party in contesting, impairing or
disparaging in any manner, either directly or indirectly, another party's (the
owning party's) Marks or its ownership rights in its Marks. Any and all
goodwill arising from the use by a party of another party's Marks shall inure
solely to the benefit of the owning party, and each party hereby expressly
acknowledges the other party's superior rights therein.
12. TERM AND TERMINATION.
(A) TERM AND RENEWAL.
(i) Term. The term of this Agreement shall commence upon the
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Effective Date and shall continue for three (3) years thereafter (the
'Term') unless previously terminated as set forth below. The Term shall
include any renewal terms (as discussed in Section 12(a)(ii) below).
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(ii) Renewals; Right-of-First-Negotiation.
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(A) If CDnow desires to renew this Agreement, then CDnow shall
notify Jam and Straight Arrow of its intention to renew not less than
seventy-five (75) days prior to the expiration of the Term, and,
beginning not less than sixty (60) days prior to the expiration of the
Term, Jam and Straight Arrow agree to diligently and in good faith
negotiate with CDnow to determine reasonable terms and conditions for
renewal of this Agreement and extension of the Term prior to the end
of the Term. If the parties are not able to conclude such negotiations
within thirty (30) days of their start, then Jam or Straight Arrow
shall be free to initiate negotiations with any third party.
(B) Except as set forth in Section 12(a)(ii )(A) above, Straight
Arrow and Jam shall not negotiate with any third party while the
Agreement is in effect and while any such negotiations are in
progress.
(C) If the Straight Arrow/Jam Exclusive License Agreement is
terminated at any time during the Term or while CDnow is negotiating a
renewal of the Term, then CDnow shall have the right of first
negotiation to use the Straight Arrow Content (similar to the license
set forth in Article 2 above) directly with Straight Arrow, and
Straight Arrow will diligently and in good faith negotiate such
license for a reasonable period of time.
(B) TERMINATION FOR CAUSE.
(i) If a party becomes insolvent, files a petition in bankruptcy,
makes an assignment for the benefit of its creditors or dissolves or
ceases to do business, any of the other parties may terminate the
party's rights and obligations under this Agreement (except for the
obligations applicable to the party specified in Section 12(e) below).
The occurrence of a party becoming insolvent, filing a petition in
bankruptcy, making an assignment for the benefit of creditors or
otherwise being no longer able to fully perform its obligations under
this Agreement and thereby terminating or having terminated its rights
and obligations under this Agreement will not cause this Agreement to
be terminated with respect to the remaining parties. Notwithstanding
the foregoing, such termination shall not relieve the terminated party
from liability for the performance of its obligations prior to such
termination, and termination by a party shall be in addition to all
other rights and remedies the terminating parties may have available
to them under this Agreement or at law or in equity.
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(ii) If a party materially breaches any of the terms of this
Agreement, any other party may terminate the breaching party's rights
and obligations under this Agreement (except for the obligations
applicable to the party specified in Section 12(e) below) thirty (30)
days after written notice to the party of such party's breach of such
terms, which breach is not remedied within such 30-day period to the
reasonable satisfaction of the non-breaching parties. Notwithstanding
the foregoing, such termination shall not relieve the terminated party
in breach from liability for the performance of its obligations prior
to such termination, and termination by a party shall be in addition
to all other rights and remedies the terminating parties may have
available to them under this Agreement or at law or in equity.
(C) TERMINATION FOR BREACH OF EXCLUSIVITY. CDnow may terminate this
Agreement immediately upon providing written notice of termination to Jam and
Straight Arrow in the event that Jam or Straight Arrow breaches any of the
exclusivity provisions or their respective representations and warranties set
forth in this Agreement.
(D) TERMINATION AS A RESULT OF TERMINATION OF THE STRAIGHT ARROW/JAM
EXCLUSIVE LICENSE AGREEMENT. If the Straight Arrow/Jam Exclusive License
Agreement is terminated or modified (such that Jam cannot fulfill its
obligations to CDnow under this Agreement) at any time during the Term, then
CDnow shall have the right to immediately terminate this Agreement, receive a
pro rata refund of all outstanding, unearned advance payments made in advance to
Jam, and the provisions of Section 12(a)(ii)(C) shall apply.
(E) EFFECTS OF TERMINATION. Upon the termination or expiration of this
Agreement, each party will immediately cease any and all existing, and not make
any future, use of the other party's name, brand names, Marks and other
proprietary indicia, and CDnow shall cease all use of the Content, and each
party shall certify the same (as applicable) in writing to the other party.
(F) SURVIVAL. Paragraphs 1, 7(a), 11(c), 11(d), 14 (for any actions that
arose during the term of the Agreement), 15 and 16 shall survive termination of
this Agreement.
13. GENERAL REPRESENTATIONS.
(a) Each party represents and warrants that it has, and will retain during
the Term, all necessary rights, title and authority to enter into and fulfill
its obligations under this Agreement, to grant the other party the rights and
licenses herein granted and to perform all of its obligations under this
Agreement.
(b) Each party represents and warrants that as of the Effective Date and
continuing throughout the Term (i) there are no restrictions, agreements or
understandings whatsoever to which
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the representing party is a party that would prevent or make unlawful its
execution of this Agreement or its engagement hereunder; and (ii) that its
execution of this Agreement and its engagement hereunder shall not constitute
a breach of any contract, agreement or understanding, oral or written, to
which it is a party or by which it is bound.
(c) CDnow represents and warrants that to the best of its knowledge any
content provided by CDnow and displayed on CDnow's Site during the Term does not
constitute defamation or invasion of the right of privacy or publicity, or
infringement of the copyrights, Marks or other intellectual property rights, of
any third party. This representation and warranty shall specifically not apply
to content provided by visitors to CDnow's Site such as visitors who use chat
rooms, bulletin boards, or other forums, which allow visitors to display
material that is not within the control of CDnow.
(d) Jam represents and warrants that to the best of its knowledge any
Content provided by Jam to CDnow during the Term under this Agreement does not
constitute defamation or invasion of the right of privacy or publicity, or
infringement of the copyrights, Marks or other intellectual property rights, of
any third party.
14. INDEMNIFICATION.
(A) CDNOW INDEMNIFICATION. CDnow shall indemnify, defend and hold harmless
each of Jam and Straight Arrow and their respective affiliates, directors,
officers, employees and agents, against any and all claims, actions,
liabilities, losses, and expenses (including reasonable attorneys' fees) brought
by a third party relating to or arising out of any claim that any content
provided by CDnow and displayed on the Co-branded Pages or the RSN Sites during
the Term constitutes a defamation or invasion of the right of privacy or
publicity, or infringement of the Marks, copyrights, or other intellectual
property rights, of any third party. This indemnity shall specifically not
apply to content provided by visitors to CDnow's Site who use CDnow's chat
rooms, bulletin boards, or other forums which allow visitors to display material
that is not within the control of CDnow.
(B) JAM INDEMNIFICATION. Jam shall indemnify, defend and hold harmless
CDnow and its respective affiliates, directors, officers, employees and agents,
against any and all claims, actions, liabilities, losses, and expenses
(including reasonable attorneys' fees) brought by a third party relating to or
arising out of any claim that any content provided by Jam that is displayed on
the Co-branded Pages, CDnow's Site or the RSN Sites during the Term constitutes
a defamation or invasion of the right of privacy or publicity, or infringement
of the copyrights, Marks or other intellectual property rights, of any third
party.
(C) DUTIES OF THE INDEMNIFYING PARTY. The indemnified party shall promptly
provide the indemnifying party with written notice of any claim, which the
indemnified party believes falls
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within the scope of this Article 14; provided, however, that, except to the
extent the indemnifying party is actually prejudiced by the indemnified
party's failure to provide such prompt notice, such failure to provide prompt
notice hereunder shall not limit the indemnified party's rights under this
Article 14. The indemnifying party shall have the right to control the
defense and, if applicable settlement of such claim; provided that in defending
or settling such claim the indemnifying party shall not prejudice the rights
of or disclose the Confidential Information of the indemnified party, without
the prior written consent of the indemnified party. The indemnified party may,
at its own expense, assist in the defense of any such claim if it so chooses,
provided that the indemnifying party shall control such defense and all
negotiations relative to the settlement of any such claim.
15. CONFIDENTIALITY; PUBLIC RELATIONS.
(A) PROTECTION OF CONFIDENTIAL INFORMATION. Each party agrees that the
Confidential Information of the other parties will be held in confidence to the
same extent and the same manner as each party protects its own Confidential
Information, but each party agrees that in no event will less than reasonable
care be used. Each party shall, however, be permitted to disclose relevant
aspects of such Confidential Information to its officers, employees and
consultants on a need-to-know basis for the purpose of such party's performance
of its obligations under this Agreement, provided such persons agree to protect
the other parties' Confidential Information to the same extent as required under
this Agreement. Each party agrees to use all reasonable steps to ensure that
the other parties' Confidential Information received under this Agreement is not
disclosed in violation of this Section 15(a). For purposes of this Agreement,
'Confidential Information' means the terms of this Agreement, except as
otherwise specifically provided in this Agreement; each parties' trade secrets,
financial information, processes, formulas, specifications, programs,
instructions, source code, technical know-how, methods and procedures for
operation, benchmark test results, information about employees, customers,
marketing strategies, services, business or technical plans and proposals, in
any form; and any other information relating to either party that is not
generally known to the public at large.
(B) EXCLUSIONS FROM CONFIDENTIAL INFORMATION. Confidential Information
shall not include information that (i) is or becomes generally known or
available to the public at large through no negligent act or omission of either
party; (ii) can be demonstrated to have been available lawfully to either party
prior to the disclosure or had thereafter been furnished to either party without
restrictions to disclosure or use; or (iii) can be demonstrated to be
independently developed by the recipient of Confidential Information without use
of such Confidential Information and such independent development is proven on
the basis of either party's records related to such development.
(C) REGULATORY DISCLOSURES. Each party agrees that it shall not be deemed
a breach of this Agreement for any other party to disclose the terms and
conditions of this Agreement in any required regulatory filing with the
Securities & Exchange Commission, a national stock exchange
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or the NASDAQ, which the other party, in good faith, determines is required,
provided the other party seeks confidential treatment of the material financial
terms and conditions of this Agreement.
(D) PUBLICITY. No party will make any announcements or statements to the
public or create any written materials concerning the relationship between them
without the prior written consent of the other parties, which consent is not to
be unreasonably withheld or delayed. The parties agree to issue a joint press
release within five (5) business days of the Effective Date in a form and
containing language reasonably acceptable to both parties.
16. MISCELLANEOUS.
(A) INDULGENCES, ETC. Neither the failure nor any delay on the part of any
party to exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy, power or privilege, nor shall any waiver
of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence or as a waiver of any other right, remedy, power or
privilege.
(B) CONTROLLING LAW. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement, shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania, other
than conflicting choice-of-law provisions.
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(C) NOTICES. All notices, requests, demands, and other communications
required or permitted under this Agreement and the transactions contemplated
herein shall be in writing and shall be deemed to have been duly given, made and
received when delivered against receipt when sent by United States certified
mail, return receipt requested, postage prepaid, or reputable overnight courier,
addressed as set forth below:
(i) If to CDnow:
CDnow, Inc.
Jenkins Court, Suite 300
610 Old York Road
Jenkintown, PA 19046
Attn: General Counsel
(ii) If to JAMtv: (iii) If to Straight Arrow:
JAMtv Corporation Straight Arrow Publishers
640 North LaSalle Street, Suite 560 1290 Avenue of the Americas
Chicago, Illinois 60610 2nd Floor
Attn: Howard Tullman New York, New York 10104
Attn: John Lagana
In addition, notice by mail shall be by air mail if posted outside of
the continental United States. Any party may change the address to which
communications or copies are to be sent by giving notice of such change of
address in the manner set forth herein.
(D) PROVISIONS SEPARABLE. The provisions of this Agreement are independent
of and separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.
(E) ENTIRE AGREEMENT The terms and conditions of this Agreement and any and
all Exhibits attached hereto represent the entire understanding between the
parties with respect to the subject matter hereof, and supersede all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written. The express terms hereof control and
supersede any course of performance and/or usage of trade inconsistent with any
of the terms hereof. This Agreement may not be modified or amended other than by
an agreement in writing signed by both parties.
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(F) PARAGRAPH HEADINGS. The paragraph headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.
(G) TELEFAXES CONSTITUTE VALID DOCUMENTS. This Agreement and subsequent
modifications may be transmitted by telecopy facsimile machine and such
facsimile copy shall be deemed an original if all pages thereof are initialed
and the Agreement or modifications are signed by the duly authorized
representative of the parties. Such facsimiles shall constitute valid, binding
documents and shall be regarded as such upon receipt. The original of the
document sent by telefax shall be promptly sent within seventy-two (72) hours by
overnight courier to the receiving party so that accurate files may be
maintained. Failure to send timely any original document shall not affect the
validity or binding nature of such document.
(H) FORCE MAJEURE. No party shall be held to be in breach of this
Agreement by reason of any failure or delay in its performance hereunder if such
failure is due to causes beyond its reasonable control, including but not
limited to, acts of the other party, acts of God, delays in transportation,
inability beyond its reasonable control to obtain necessary labor or materials,
or events such as fires, floods, earthquakes, storms, war, act of public enemy,
civil commotions and the like or by any law, rule, regulation, order or other
action by any public authority. To the extent failure to perform is caused by
such an event, such party shall be excused from performance hereunder so long as
such event continues to prevent such performance, and provided the non-
performing party takes all reasonable steps to resume full performance.
(I) INDEPENDENT CONTRACTORS. Each party shall act as an independent
contractor and shall have no authority to obligate or bind the other parties in
any respect. No employee of a party shall represent himself or herself to be an
employee of any other party.
(J) COMPLIANCE WITH LAWS. Each party shall comply with all federal, state
and local laws, licensing regulations and rulings of governmental bodies having
jurisdiction over its business. Nothing in this Agreement shall be construed to
require either party to perform any act in violation of any laws, regulations or
rulings.
(K) DISCLAIMER OF WARRANTY. EXCEPT AS OTHERWISE PROVIDED FOR IN THIS
AGREEMENT, CDNOW'S SITE, THE RSN SITES AND THE CO-BRANDED PAGES ARE PROVIDED ON
AN 'AS IS' BASIS WITHOUT WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF TITLE OR IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE WARRANTIES
WHICH ARE IMPLIED BY OR INCAPABLE OF EXCLUSION, RESTRICTION OR MODIFICATION
UNDER THE LAWS APPLICABLE TO THIS AGREEMENT.
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LIMITATIONS OF LIABILITY.
(i) IN NO EVENT SHALL ANY PARTY HERETO BE LIABLE FOR ANY INDIRECT,
SPECIAL, EXEMPLARY, CONSEQUENTIAL OR INCIDENTAL DAMAGES, OF ANY NATURE
UNDER THIS AGREEMENT WHETHER SUCH DAMAGES ARE ALLEGED IN TORT, CONTRACT OR
INDEMNITY, EVEN IF THE PARTY IS INFORMED OF THE POSSIBILITY OF SUCH
DAMAGES, UNLESS SUCH DAMAGES ARE DUE TO SUCH PARTY'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.
(ii) AS BETWEEN CDNOW AND JAM, CDNOW AGREES THAT JAM SHALL NOT BE
LIABLE TO CDNOW FOR CLAIMS ARISING SOLELY AS A RESULT OF A BREACH BY
STRAIGHT ARROW OF ANY OF ITS REPRESENTATIONS, WARRANTIES OR OBLIGATIONS
HEREUNDER. AS BETWEEN CDNOW AND STRAIGHT ARROW, STRAIGHT ARROW SHALL NOT BE
LIABLE TO CDNOW FOR CLAIMS ARISING SOLELY AS A RESULT OF A BREACH BY JAM OF
ANY OF ITS REPRESENTATIONS, WARRANTIES OR OBLIGATIONS HEREUNDER.
(M) BINDING NATURE OF AGREEMENT. This Agreement shall be binding upon the
parties hereto and their respective heirs, executors, successors and assigns.
Neither party may, without the prior written consent of the other party, assign
or transfer this Agreement or any obligation incurred hereunder. Any attempt to
do so in contravention of this Section 16(m) shall be void and of no force and
effect.
(N) TIMELY PERFORMANCE. Each party acknowledges that in the performance of
this Agreement, time shall be considered of the essence.
[Signatures on next page.]
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IN WITNESS WHEREOF, the parties' duly authorized representatives have executed
this Agreement as of the day and year first above written.
CDNOW, INC. STRAIGHT ARROW PUBLISHERS
(A NEW YORK PARTNERSHIP)
By:/s/ Jason Olim By: /s/ John M. Lagana
Name: Jason Olim Name: John M. Lagana
Date: April 8, 1998 Date: April 9, 1998
JAMTV CORPORATION
By: /s/ Howard Tullman
Name: Howard Tullman
Date: April 8, 1998
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EXHIBIT A
CARRY-THROUGH BAR SPECIFICATIONS AS OF 4/15/97
SIZE
Total Carry-through Bar Size: 468(w) x 25(h) pixels as of April 1, 1997 all
Carry-through Bar sizes must be 468(w) x 25(h) to comply with the Internet
Advertising Bureau's (IAB) banner standards.
Live area for Partner Logo: 360(w) x 24(h) pixels
COLOR
Bar is black at all times.
Only partner logos/icons can be as many colors as desired with a black
background 'Return to...' copy is mandatory and must be set up as white
Helvetica Neue Black 10pt type, centered and 5 pixels in from the left-hand side
of the first black bar
We recommend all copy to be white
To pick up a template go to http://cdnow.com/cobrand_template
FORMAT
Must be saved in a GIF file format
PLACEMENT
Carry-through bar is placed on the top and bottom of each CDnow page. Only those
people who visit CDnow from your site will see the Carry-through bar
URL/ADDRESS
Partners have the option of 1 to 3 links on their Carry-through bar-- The URLs
will be provided by the partner
If more than one link is desired, the bar must consist of multiple gif images
that reference previous Carry-through bar specifications. When using multiple
gif images keep two pixels between each bar. No image maps are permitted. Please
see the following page for more examples of possible banner solutions.
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SOURCE CODE
CDnow will provide the partner with a from equals (from=) tag. This tag allows
us to identify customers coming from the Partners site to CDnow.
TIMING
CDnow requires a minimum of five business days from when we receive the Carry-
through bar to implement it on our site.
CARRY-THROUGH BAR SAMPLES
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EXHIBIT B - ROLLING STONE CONTENT
The Rolling Stone Content shall include the following [XXX]
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or which Straight Arrow has access to through a licensing arrangement with
any other Entity, in the possession and control of Straight Arrow, Wenner
Media and/or Rolling Stone magazine, which may be used to create new and/or
supplementary or re-purposed audio/visual and multimedia material for the
Rolling Stone Network, all to be provided in Straight Arrow's discretion.
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EXHIBIT C - MOCKUPS GUIDELINES FOR PLACEMENT OF CDNOW LINKS ON THE RSN SITES
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Linking, Content Licensing and Advertising Agreement - JAMtv Corp., Straight Arrow Publishers and CDnow Inc.
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